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Aug 16th, 2010: Update 1 – Pre-Market

Posted by pugsma on August 16, 2010

8:00 am EST:  ES Futures have traded in a range from 1068.5 to 1081.5 (1071.5 to 1084.5 cash) overnight.  So they came very close to closing the ES 1067 to 1069 (1070 to 1072 cash) gap.  The support areas to watch today are ES 1067 (1070), ES 1062 (1065) and ES 1054 (1057).

I have the primary count that this is a wave v-(c)-2-[1]-P3.  We should be looking for a potential bottom of this wave at either ES 1067 (1070 cash) which is the 50% retrace of 1-[1] or ES 1054 (1057 cash), which is the 62% retrace.  The ES chart shows a falling wedge that cound end in the ES 1062 to ES 1067 area.

The alternate count (shown on Sunday) is  that we are still in P2 down.  This case we are in wave v-1-[C]-P2.  Same targets as the primary count.

One thing that that should concern traders today is that ES 1054 (1057) is widely known as a key area of support to hold.  If it breaks, somthing akin to the Flash Crash in May 2010 could occur and this market could cascaded lower very rapidly.

SP-500 15-min real-time chart link:  http://www.freestockcharts.com?emailChartID=7ad0cf1e-0233-4faf-ab0b-6a1ff2026869

ES Futures (7:25 am):

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